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Automakers pause North American production on US winter weather

Automakers pause North American production on US winter weather

FILE PHOTO: Workers assemble a Ford truck at the new Louisville Ford truck plant in Louisville, Kentucky, U.S. September 30, 2016. REUTERS/Bryan Woolston

MEXICO CITY: Freezing weather that interrupted gas supplies in the southern United States and Mexico was wreaking havoc on Thursday on car manufacturing plants on both sides of the border, with Ford Motor Co, Nissan Motor Co Ltd and Toyota Motor Corp reporting disruptions to their assembly lines.

The cold snap has overwhelmed Texas' power grid, while natural gas supplies to Mexico from Texas were interrupted, leaving millions without power in Mexico's industrial northern states earlier in the week.

In Texas, freezing temperatures are expected to last through Saturday.

Mexico generates most of its power from natural gas, largely imported from the United States. The two countries also require intricate supply chains to be functional to supply auto and other industrial operations on both sides of the border.

In six Mexican states, significant power cuts contributed to the suspension of operations at auto assembly plants, according to Mexican auto association AMIA.

Some car factories also use natural gas on their production lines. Fewer supplies have meant at least five plants reported cutting their consumption of the fuel by between 20per cent and 30per cent since Tuesday, the association added.

Ford on Thursday said adverse weather had led to the temporary closure of plants in Kansas City, Michigan and Kentucky, as well as a plant in Hermosillo in the northern Mexican border state of Sonora.

Late on Wednesday, Volkswagen said it would suspend some production in Mexico on Thursday and Friday due to limited natural gas supply. The cut in supply also affected Audi as well as General Motors Co's plant in the central city of Silao, where work stopped on Tuesday night and Wednesday.

GM said on Thursday that first-shift operations were canceled at plants in Arlington, Texas; Spring Hill, Tennessee; and Bowling Green, Kentucky. The first two factories also would likely be closed for the second shift.

Other automakers affected by the winter weather include Toyota and Nissan.

Toyota said its Texas plant would be idled through Friday, while first shifts would not operate on Thursday at plants in Mississippi and Alabama. In Mexico, the automaker said it would reduce shifts and suspend work in the coming days at its plants in Baja California and Guanajuato.

Nissan said production at plants in Smyrna, Tennessee, and Canton, Mississippi, remain suspended, and that in Mexico it was halting some production in Aguascalientes while seeking to quickly switch to liquefied petroleum gas at other plants.

Ford's Kansas City plant's operations have been canceled from Feb. 13-22, the company said.

Mexico, Latin America's second-largest economy, has reeled as gas imports via pipeline from Texas dropped by about 75per cent over the last week, causing billions of dollars of losses on power outages and factory closures.

(Reporting by Sharay Angulo in Mexico City; Additional reporting by Ben Klayman in Detroit,; Writing by Drazen Jorgic and Daina Beth Solomon; Editing by Frank Jack Daniel, Diane Craft and Matthew Lewis)

Source: Reuters

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